happen in market hours, but any information we get moves the markets. adam, you are covering it all, i'm sure. >> depends who we ask, halfway through the trading day or three days from fiscal armageddon. i'm adam, melissa and lori off, but is this the day, a make or break deal making session at the white house between president and leaders in two hours? expectations low. what do you expect out of washington; right? low for a deal to meet the deadline. the markets show traders, well, they are not exactly optimistic. right now, stocks down 69 points, moving lower for the fifth straight session. one crisis, however, has been averted on the east coast and gulf coast. a massive looming port strike will not happen, at least for now. going live to miami ahead in a

few minutes for up to the minute details on that and why it's not -ealing a blow to the u.s. economy. first, stocks, as we do every 15 minutes, going to the floor. new york stock exchange. lauren is there watching it. any indication from the investors and traders about a deal? are they telling you if they have an inside scoop? >> they do not have an inside scoop, but there's con play sen sigh, and stocks stuck in the range, down half a percent for the broader market, down for five days in a row waiting, two hours from now, to hear somebody in washington say something about fiscal cliff, and then we'll move on that news, but traders are saying if we get a deal done, we'll see the market take off. we have not seen a santa claus rally this december, unfortunately, and, in fact, the nasdaq lower. stocks lower, by the way. here's the new york stock exchange, three stocks trading down for every one trading up. another thing trading up a the vix index.

it's 20.18. the vix has traded below the two decade average, and that's not happened this month. we broke that trend. we have an uptick in the vix now. adam, back to you. adam: the question of the day, are we closing in on the deadline and potential plan to avert the fiscal cliff, about this afternoon's meeting between the leaders, and expectations between a deal are not running as high as they were back in november. remember this? >> i believe we can do this, avert the fiscal cliff that is right in front of us today. >> this is not something we are going to wait until the last day of december to get it done. adam. adam: proof words are cheap. it's the end of diecious, and

absolutely nothing was done. why does it come down to the wire? republican senator of north dakota joining us now from capitol hill. sir, we appreciate you being with us, you were on fox business the other day, and are we going to have a deal or as some people are saying, do both sides want us over the cliff because it's easier to restore spending cuts? >> i'm in the camp to just keep pushing. that's where i'm coming from. as you said, the president and the leadership and the congress will have a meeting today at three o'clock, and so by four, they'll come out, and we'll have a better idea as to whether or not they'll come up with something, but regardless, for myself, and, i think, a lot of the senators and members of congress, we're just going to keep pushing because we got to come together and get people to agree on some kind of package. >> are you hearing anything from the white house? the other day it was scott brown, the senator from massachusetts, who will be leaving in the new congress, but

he said a deal was coming from the white house. hearing any idea what it looks like? perhaps a scaled down deal from president obama? >> yeah. i believe we need a big deal, but the more likely possibility, at this point, is it's really focused on a tax deal where they come up with some number between what speaker boehner and president obama talked about, that they address things like alternative minimum tax, and put together a deal that we either try to pass before the end of the year or get agreement to come back right after the first of the year and pass it through both houses. adam: the numbers were something like the president at one point was willing to raise his baht -- bottom line to 400,000. if that's the deal, can you guys, can the men and women in our political leadership pass something before midnight, december 31? >> well, i think so.

i mean, and you're going exactly the right direction. if you take what's been put on the table, you got the senate bill, you got the house bill, and you got what president obama and speaker boehner talked about, somewhere in the middle, i think, is a deal we could pass before year end, and as you say, it would be in the $400,000 to $500,000 range, but there has to be a commitment any revenue generated goes to savings, and not more spending. that's the other part of the equation that the president has to step up on to get a deal. adam: senator, we'll have a guest on that says no one, all the way back to the mid-1950s has ever cut government spending. we continued to add spending every year, both parties guilty. why should that change? why should anyone watching us right now believe anybody in washington's going to be fiscally responsible? >> adam, it's the right question, and that's dwr i said

a minute ago, we need a big deal. if it's a smaller deal, remember, we got to go to the debt ceiling discussion and some of the other trigger points and make sure we get the savings and the entitlement reform and the things we need to get this deficit and debt under control. it's about getting the economy on track and also getting the deficit under control. adam: you are a moderate, highly popular in the state of north dakota, and you have compromised with both sides on these issues, but the vast majority of the public looks at congress, all of you, the house of representatives and the senate looking at you guys with disgust. is that coming across in the halls of the capitol? do the people there understand what the people out here, the 310 million of us consider when we think about the political leadership? >> i think that is absolutely what's pushing the negotiation why we have to stay at it. as i said a minute ago, i'm in the camp where we have to continue to push until we get

the job done. i'd like the big deal now. if we don't get the deal, get as much as we can and continue to go after the things we're talking about, the reforms and the savings, that we need. adam: senator, we appreciate you being with us here on fox business. while president obama and the congressional leaders work or appear to work to try and come up with a fiscal cliff deal, the full house is not even scheduled to return to washington until sunday afternoon. democratic congressman of delaware joining us now from wilmington. i'll ask the question, but the majority of the citizenry is looking at all of you with disgust. you can't get a deal done. the deal that's going to come forth was probably something that was offered a year, a year and a half ago. why do we go through this chaos? >> well, i think that's exactly right, and that's certainly what i hear from my constituents here in the state of delaware which is just get it done, keep at it,

work hard, compromise, come up with something that's going to really address this. adam: why don't they do it? the 400-plus members of the house of representatives put up with this bs? >> well, that's a good question. a number of us sent letters to our leadership and made our opinions known. i actually agree with my colleague, mr. hogan, from the senate about wanting a big deal. we have to deal with the fiscal situation now. it's not a one time thing, but a process, particularly, when you consider that the major ease caylating costs, rising cosss, are in health care, and with our aging population, we got to get costs under control. it's going to be an ongoing process. we have to keep at it. we -- the house should be in session right now in washington. we're coming back on sunday, and i'm hopeful we'll work straight through until new year's day to get it done.

adam: you were secretary of finance in delaware, put together, since arriving at the house of representativings, bipartisan working groups to solve the issues, and yet we don't hear from you or the working group to get thh issues done, and here we are, spending countless hours, and wasting billions of dollars economically. people are holding back on their spending because nothing has been done. how do you, as a moderate, someone who can deal with the other side, get the leadership to get out of the way and get a deal done? >> just keep pushing. that's all we can do. you can't have 535 members from the house and senate negotiating this deal. we have to let the leadership know what we will accept and we do that, rely on the leadership and as mentioned a few minutes ago, hope the meeting today will result, and looking at the two sides, they are close in terms of the numbers, and that's the structure and process going forward so i remain hopeful

we'll get a deal that leadership brings back that we can support in the house as well in the senate. adam: when you talk a deal that would support the house, what do the democrats have to give? one issue that democrats have to will -- to be willing to give on and the republicans have to give on? >> it's simple. the democrats have to accept spending cuts they are not going to like, and the republicans have to be willing to accept revenue they are not going to like, and both sides showed a willingness to do that, a recognition this is for the good of the country, and so i'm hopeful that we'll have that kind of an agreement from the leaders through the end of the week here. adam: that was the agreement, essentially, a year and a half ago, and here we are, unagreeable because we was not done it yet. congressman, appreciate you being here and i apologize if i came across testy with you because i know you work with your colleagues on the other side of the floor to get things done. >> that's what i hear from my constituents here as well, so

that's the fire under our feet here to get it done. adam. we'll keep the fire lit. all the best to you, sir. what companies lose the most? elizabeth mack donald is tracking the tickers to let you know before january 1st. plus, the big f for the big apple for 5 million commuters on subways, things will be easier. now if they can only clean the darn things, look at met tams -- mellals -- metals as we head to break. ♪

ad. adam: you have to ask which companies will hurt the most if we go off the cliff. we have the bottom line, and, liz, this is something to use as investors plot a strategy with no ciedged of come presenceble answers. >> here's the companies that could dive first without the compromise. you'll see them here. it's curtesy of goldman sachs, and dozens of companies expected to be affected. it's not just defense companies. it's also other companies that get a lot in the way of government contracts, and

there's companies here, get 50% or more of their sales from government contracts. really interesting stuff. it's not just, again, defense companies. you're going to see waste management in there, an environmental company. motorola in there as well. we talked to fidelity. they are concerned as well telling amists to watch for certainly insexes -- indexes and others that cover financials and others cited there. adam: i have friends saying there's no fiscal cliff, it's make believe trumped up by the media and parties to scare people, get rate, and, perhaps bring about policy that's not true. look at the companies, the fact that the government -- look at the contracts that would be canceled, those are people who would lose jobs in several months. the recession that the cbo is legitimate looking at that list.

>> that's right, adam. it's interesting because it flushes out what companies basically operate on the iron lung, with an iron lung, because of the government subsidies. it was interesting to me, the list of the companies that get so much of the revenues from the government. you know, we're seeing, too, where are the safe havens, fidelity looking at biotech and the health care industry meaning real estate so those are two safe havens. again, biotech, yeah, venture capital guys, where biotechs get money from. the nih budget with research and development funding, 8% cut there. you now, this is a warning we heard from goldman sachs, watch for the companies. they -- by the way, the other one too, these companies also underperformed after the last debt ceiling fight back in 2011. these are the ones to watch for. adam: thank you very much. >> sure, dliected. adam: has real world

implications for everybody. money to burn as we do every 15 minutes. lauren on the floor of the new york stock exchange with the home builders. they don't have money to burn, do they? >> nope, they are putting in a mixed performance today. see that camera angle? all right. winners are kb home and nvr and losers as well. the news is that pending home sales last month, best level since april 2010. i want to show you two really nice charts. one year charts of lanar and toll brothers. you see the nice gains over the past year. look at that. lanar doubled in value in just a year's time. this definitely shows us that the home market, the housing market is recovering. back to you, adam. adam: i was, well, lauren, i was thinking of menards, like a lowe's and depot, save big money, but not lanar. see you in 15. the federal government wracking

up bills, and it's a hefty tab and running out of ways to pay it off. private business has a few tips for washington when we come back. we'll share them with you. ♪ [ male announcer ] this is joe woods' first day of work. and his new boss told him twongs -- cook what you love, and save your money. oe doesn't know it yet, but he'll wk his way up from busser to waiter to chef befo opening a restaurant specializing in fish and me from the great northwest. he'll start investing early,

he'll find some good people to help guide him, nd he'll set money aside from his first day of work to his last, which isn't rocket science. t's just common sens from td ameritrade.

adam: an interesting fact, since 1954, the federal government's cash and non-cash expendtures have risen every single year. it was every year. did not matter who was president, democrat, republican, didn't matter who controlled congress, democrats, republicans, and even if the economy was booming or struggling. the u.s. government kept spending and spending, the enegizer bunny of spending. the next guest says he has the fix for the government. it should operate like a small business. he is joining us here in studio. people are saying governments are different than business, but

at the end of the day, you eventually cannot spend more than you have; right? >> cash in, cash out, and for 58 years, every single year, republican, democrat, the government is spending more money. it makes no sense to any organization. adam: appointments out that wwen people in washington talk of cutting spending, they are saying we cut the growth rate of spending. you and i, if we cut spending, it's a dollar to 90 cents. in washington, we budgeted $1.50, cut it to $1.25, so we saved 25 cents. >> crazy logic. by the way, jimmy carter, governor of georgia, actually, implemented the zero based budgeting system there where they started at zero each year and validated the expense. adam: didn't do that at the federal level, but as governor, it was zero based budgeting. what is that?

similar l ton terms? >> it is simple. start with zero, the assumption that in your department, you're not getting anything each year, and then you have to validate your expenses. it's the way that you run households, hopefully, and what it does is it makes the government disciplined in spending, but, of course, it's hard to do that. adam: at the federal level? is what we got last year, and we expect this plus. >> that's what is killing us. each year, the government spends more money, independent of tax revenues, right, and what's coming in on the front side of it so it's killing our deficit, $16 trillion. adam: what about the people who say, look, the public expenditures from the federal government, percentage of gdp -- >> nonsense. adam: why is that nonsense? >> we can want look at that. here's the problem with that. that is just a voodoo economics. remember that term? adam: i do, of course. >> it's crazy economics.

here's why the economy gets bigger and bigger and bigger so that deficit or that debt number, as a real number, goes up. adam: percentage is concept, but -- >> doesn't matter. if the money keeps going up, each year, there's more and more debt, $16 trillion. remember, we have to pay that money back. it's not abstract. it's real. adam: that figure, that percentage is actually 24%. >> that's correct. adam: we are going to spend roughly a trillion dollars that we don't have going forward. >> in a good system. remember, there's 27 million privately held companies out there making hiring decisions. they are sophisticated, and they know how economic structures work. when they see that, are they going to be willing to hiver people and make expenditurings and grow? the answer is it had a real depreciating effect on willingness to take risk. adam: quickly, you have president obama and speaker boehner in a room. twenty-seconds to tell them what

to do? >> just make a plan, even if it's not a good one, let private companies know what you're going to do earlierment don't do it on december 31. we need time to plan for our businesses. you got to get your act together. compromise, even if it's not a great plan, please, something. we can go out and hire people. it's simple. it's so simple. adam: thank you. have a good day. >> thank you. adam: speaking of facebook, did we speak of facebook? friended anybody lately? what will next year have in store for the tech industry? we'll continue the outlooks for 20 # 13 series next with potential winners to watch and take a look at some of today's winners and losers on the s&p500. ♪

adam: 1:30, and every 15 minutes, check your investments, going to the floor to the new york stock exchange, and lauren seeing red down there. it's not pretty. >> still in the red, adam, but well off session lows, it's an interesting final hour of the trading session today with top leaders meeting to discuss possibly averting the fiscal cliff. the s&p down now five points and dough down, up in december by three points, a nail biter looking at it like that. the vix index is something we have to talk about, it's the fear in the market place, it's

20.18, a spike of 3%. back to you. adam: the only person to make red look good. >> why, thank you, adam. adam: have a good day, see you in 15 minutes. oil down the second day as the eia to a nine month high. looking at the oil demand, there's a big drop in gasoline demand in the latest week, and this is in the face of the gasoline demand in the latest week. this is in the face of the latest concerns of the fiscal cliff. a nine month high in the latest week. demand is being described as very soft. another figure in the crude oil market from a trader's perspective, wti trading down

50% from its 100 day average. we are seeing. light participation from traders and that market, as well. crude oil prices down 8%. natural gas, this has been a winning commodity for 2012. best performer on the cme right now. we have a report from the government this morning that showed a 72 billion qubit feet drawn out and natural gas. people are cranking up the heat and have more demand for natural gas. also, some major weather forecast for colder than normal temperatures. that too is helping to push up natural gas prices. natural gas, by the way, adam, up 12%. back to you. david: we had a guest on melissa

francis is show last week, gas prices will fall after march. if that something investors should be taking into consideration. sandra: absolutely. certainly a lot a lot of folks pack up the car and go on spring break. we do start to see gasoline prices start to rise. crude right now is sitting very healthily above $90 a barrel. back to you. david: thank you. outlook 2013. as we continue on our series of what to expect in the new year, right now we will focus on tack. we have a few names of products that may surprise you. can we start first with facebook? you do not think they will deliver. i heard on a radio discussion,

their share prices have fallen. one person saying they will never recover. look at them today. i think they are trading at $25. six months ago, one guy was wrong. why do you think they will not deliver? >> it looks like the organizational structure of facebook is one that is not allowing them to wrap their head around the advertising revenues that they have to pull in. they do not seem to understand advertising. if you do not understand, you will not do well generating revenue. we had the blowup over the holidays where the sisters picture went out and that is the ex- head of marketing. that was not handled well. david: she did not realize if she got tagged in a photo that it was potentially open for everyone to look at.

you either love or hate it. i love apple products. you do not think tim cook will be able to deliver going forward either. >> it is like looking at a super bowl team. after the super bowl is over, the quarterback passes away, a lot of players leave. what are the chances they will win the super bowl again next year? pretty much a slam or not. apple is at such a high right now, it even after they slipped, they have to perform excellently. the apple of today is not the same apple that we had even a year ago. they are starting to throw products out. the ipad mini, the product that came at 65% over market. something that steve jobs would never intentionally do. they are doing all right with selling, but they have to sustain the sales next year.

it will be increasingly difficult. apple is throwing out products fairly rapidly. number tim cook came out compact. his training is much like hp and dell. he was never a steve jobs clone. unfortunately, apple was designed to run under steve jobs. david: steve jobs is gone, tim cook is in. does apple ever recover the historic price levels that we saw for their stock just a few months ago? >> it seems, i mean, if you change enough of a company that has been trading very well that has been doing excellent, making almost no mistakes, it is difficult, the odds are against it. it is always possible, but the odds are against it.

the apple today is not the apple that was trading at those highs. david: they are telling me i have to cut short. no po, flop or success? will this phone help them? >> i love the 920. android is looking weak. apple is looking a little bit weaker. those two companies will try to come back next year. the 920 is sold very well. it will be a race to see which company can actually restore their old glory. both of them are looking pretty good right now. the phone that i am caring right now is the 920. david: does someone by rim? >> i think they are still too expensive. i think they will be independent for much of the year.

they are an acquisition target if they do not recover by midyear. david: i cannot believe i did not ask you any questions about cars, but we have ran out of time. i appreciate you being here, sir. >> pleasure. happy new year. david: it looks like the new york city subway wants in on th3 game. the transportation authority has a new path out called subway time. this app will reveal arrival times. for the first time in more than 100 years, straphangers, that is those of us who ride the subways, will be able to plan our commutes down to the minute. subway time will use new signals that transmit location and speed data. the signals are connected to centralized computers which will then update on the app. subway times will be free.

the app is only available on iphone and ipod touch is. android and window devices are still in development. it only took them 11 years to finally get these type signals into the subway system at a cost of roughly $230 million. just 11 years. at last a deal reached. no, not on the fiscal cliff. we are live in miami, florida, next. the holidays are a sweet spot for cinnabon. president -- joined us and how this year is stacking up for her company. not even 40 years old and on her way to greatness. ♪

♪ >> it is 1:41 p.m. and time for your fox business brief. president obama will meet with congressional leaders in just a few hours from now. right now, the dow is down 72 points. the chinese government is announcing stiff new rules to use the internet. the communist country now requires users to provide their real name to service providers. it places a greater burden on web companies. fox sports media group is buying cleveland indians sports channel. it is worth -- it will give fox sports the right to broadcast indian games for ten years. it is owned by news corporation.

that is the latest from the fox business network. giving you the power to prosper. ♪

david: who does not know that sweet smell of cinnabon. you follow your noses to the bakery chain nearest store every day. it is not just here in the united states. congratulations, you guys just surpassed 1000 stores. >> our locations are located in shopping and traveling venues. terms of growth in the u.s., but, todd outside as well. russia, the middle east continue to be our largest and fastest growing markets.

david: i guess the middle east has a sweet tooth over there. it is a little different than the one we eat. >> i think they certainly like to indulge. the toppings seem to be even more gui and fabulous than you see in the u.s. david: you have a franchise in libya. >> we found incredible franchise partners. focus. international. they found the right franchise partners. that is what it takes. [talking over each other] david: getting back to cinnabon. we all know that every now and then, as long as you do it in moderation, there is no harm in eating something that has 800 calories. you have no plans to change that formula. >> yes. we help people indulge

responsibly in portion size. we have a mini buns that is only 300 calories. there are lots of ways to indulge responsibly. david: the rest of the franchise is actually the core of a business that is expanding. >> absolutely. the heart of the business is still franchising. cinnabon branded products in grocery stores are one of the fastest growing divisions of our business as well as cinnabon creating products for other restaurant chains. david: if someone wanted to get in on one of these franchises, what is the protocol? >> go do cinnabon.com and click on franchising. it costs about 30,000 for the franchise fee and less than a quarter of a million to build a factory. david: will the fiscal cliff mess up your business? >> anything that affects

consumer confidence will affect us. the bigger picture is for our franchisees, they want to update that the business climate will cootinue to improve. david: i will wrap it up there. i hope we have you back on. your personal story is incredible. you had never had a passport. they sent you to australia. you opened cinnabon bakeries around the world. continued success. >> thank you. david: lauren simonetti is on the floor of the new york stock exchange. >> barnes & noble shareholders having a nice day today. the stock is up nearly 6%. a publishing and education

company that barnes & noble owns, it consists of the digital e-reader as well as 674 bookstores across the u.s. that is why the stock is up. it is under some pressure. holiday sales at barnes & noble will miss expectations. the milk is one of the reasons behind that weakness. back to you, adam. david: see you at the top of the hour. shares of hewlett-packard dragging the dow down. say, what? we had this year's most annoying phrases. you know, like, you know. just saying. you will love them. next. ♪

david: we have a deal between potential striking dock workers and port operators and that will prevent a strike that would have prevented things going to texas. >> at least one end of your cliff now reverted. this would have had major economic impact all across the country. no east coast and gulf coast port strike will be happening. however, both sides still have negotiating to do giving each other a 30 day extension.

they are salary supplements that are essentially greater money to the workers based on the greater the weight of those containers. the owners wanted those path. the workers did not. this is from the federal mediator in washington. "it has been agreed upon in principle of the parties." the parties have further agreed to negotiate all remaining issues. freezing every container at those ports. within those containers are electronics, auto parts, close, textiles, just about every consumer product you could think of.

boston of northeast all the way down to the gulf of mexico and houston texans. billions and billions of dollars worth of goods. >> it is not just the local area. it is the entire region and the state and going nationally, as well. if we had gone over the fiscal cliff, the strike would also happened over the weekend and it would be a one, two economic punch. david: it took six months for the recovery after the last one. let's talk about hp. they are taking quite a bit of a hit in the market today. the pc and printer company has other headaches to deal with. giovanni josie has the stories.

shibani: this is just a matter of time. the company revealing in a legal filing late yesterday that the department of justice has launched a firm and formal investigation into the $11 billion acquisition of software maker autonomy. the buyout led to a loss of questions with counting and write off from hp. hp accusing the company of cooking the books that led to inflated purchasing. even still the company's founder and ceo remains that he did nothing wrong. "we will cooperate with any investigation. look forward to the opportunity to explain our position. we continue to reject these allegations in the strongest possible terms. this company has been plagued by scandals. new ceos, lots of headaches.

the biggest loser on the dow and it is down 75% in the last five years. it is just the latest in the series of problems. david: we will give them a pass right now. let's talk about something, giovanni, stick around for a few seconds. let's talk about something, for sure, you know, that you love. for sure. they are out with the most annoying phrases for the year. the winner for 2012 is "whatever". shibani: whatever. david: whatever. shibani: whatever. david: okay, i cannot do the valley thing. seriously. interestingly, age plays a factor in what bugs people. those 45 and younger were more irritated by the word like,

like, like. those over were more annoyed by you know, you know. shibani: can i get that list again. like, i do not know, whatever. i think what would bother me is if my daughter said that. just saying. david: you know. shibani: i do not like that term. david: really? really? do you really want to do that. just saying. okay. we have to go. we will be back in another hour. washington once again waiting until the last minute to take action. will there be enough time to make a deal? heritage foundation budget analyst will be here next. keep it here on fox business. ♪

and back to markets now. i am adam shapiro. two hours to see if the trading session and a few days until the fiscal cliff with time running out, president obama meets with congressional leaders in one hour and they do what they haven't been able to do for months, years, make the deal. wall street is anxiously awaiting washington. the dow down 79 points. how will the cliff shape the final stretch for stocks in 2012? the lackluster holiday shopping season comes to an end, detail is slashing prices trying to break even and get you to spend some box. retail analyst christian benz tells us why it could be too little too late. time for stocks every 15 minutes on the fox business network. lauren simonetti on the floor of the stock exchange. anything change? >> may be accelerated the losses, the dow is down by 79

points, market's weighting in less than an hour we have the key meeting on how to avert a fiscal cliff so we are in this standby mode. the final hour of trading should be interesting. this week has not been good. stock down five days in a row. all three major averages in the red for the week and monday is the last trading day of the year. 2012 has been good, this week not a good one. a santa claus rally in the month of december has disintegrated. adam: you were saying we were accelerating to the downside. this time yesterday we got positive news, attempted a rebound. will we see that before 4:00 p.m.? >> it matters what we hear of washington when the top leaders meet at 3:00 today so we will be watching every single whisper riders by those gentlemen. adam: you are nice to call on gentlemen. lot of people would call and

something else. >> you should hear what is going on on this floor. i can't repeat some of the things. i have a west. % the least around for saying we wish for 2013 and the worst list of 2012 and all political. adam: we will see you in 15 minutes. washington d.c. is where we are going to head next. president obama welcomes congressional leaders at the top of the hour. will come up with something to avoid automatic spending cuts? that go into effect in a couple days? rich edson is in washington d.c. with the latest. rich: it is a last-ditch attempt between top democrat and republican in the house and senate and the obama administration. aids describing a potential path forward, smaller compromise involving an extension of tax rates for income less than $500,000, extended unemployment benefits, measures to assure

tens of millions of americans avoid the alternative minimum tax, other items, congress would figure the rest out next year under such a scenario but that is not an official proposal, a deal that aides say could have house and senate if democrat and republican leaders agreed to it. currently there is no agreement, just lawmakers assigning blame. >> millions of americans are out there struggling and certainly they deserve congress that will avoid going over the fiscal cliff. which is why the president has been working to bring the leaders together. >> the way our system is supposed to work is the president is supposed to make a proposal and go across the country persuading the american people he is right. finos how to do that. then he sits down with us and we complain and adjust and amend it and bring it up on the floor and vote on it and pass it and get it resolved. that is what is supposed to happen and it can't start until the president make the proposal. rich: lawmakers are waiting to see how the meeting shapes up

next hour and so are we. neil: john boehner can deliver his caucus without spending cuts and democrats can't come to the table must -- my hand a doing this, republicans agreed to tax increases. we are going over the cliff and that might be what both sides want. >> the possible scenario where if the market reacts negatively lawmakers would feel the rush to pass something else. it became clear after john boehner put on the table keeping tax rates and taxes where they are for income amount of less than $1 million, not enough in cuts, you have to get democrats and republicans to bring this over the line in the house much like you have to do in the senate which is why this has to be worked out with a democrat and republican leaders in the white house later today in a last-ditch effort to get something done before new year's. adam: rich edson on his way to the white house. for more on the last-ditch talks to avoid the fiscal clip i am

joined by heritage foundation budget expert and data analyst director bill beach. , the conspiracy theory, in actuality both sides want us to go over the cliff to restore spending cuts and can enact tax cuts for some of us. do you think there's any credibility to that? >> may be more than a conspiracy theory. they both want to go over the cliff. in some respects it is an interesting effect. going over the cliff would definitely pushed equities down. i can't imagine it would do anything other than that but that makes bonds strong brand makes the interest rates the treasury pays on its notes last so there is kind of a funny silver lining for the short term for the federal government and the first three months while the economy slides into a lower level of economic activity, perhaps recession. there would be higher revenue so that makes it easier to handle the debt ceiling issues.

adam: what i am recalling from a year ago is the cbo report that says unemployment goes to 9%. if we go over the cliff, there is no way to avoid paying. we have tax increases that will stifle economic growth, that is what everyone says, the president said it two years ago the we're going to raise taxes or we are going tab spending cuts that could be a lot of work and raise unemployment to 9%, whether we have a deal or not. why are we wasting time? >> it is important not to make things worse. we went over the cliff in november when we ran out of time to do something really good. now we are definitely out of time. they have to get a bill in the senate by this evening in order to avoid the rules over three days, they have to suspend the rules to bring the bill in tomorrow which means any one senator could screw this deal up. they need to get it done now or get it done the first couple weeks of january because be making different kind of to

economic plans for the first half of 2013 parricular early on the dividend side. we are always talking about income tax rates but the dividend rate and capital gains rates are the really sensitive economic rates. we need to focus on those, damage to the economy if those rates go up will be substantial and long-lasting. adam: and economists said the worst part of the fiscal cliff are the tax increases because it does cycle economic growth. this meeting at the white house is all for show? do they already have a deal or is it just to save face because there's no deal and they know we're going over? >> there is no deal right now. the deal would be made by mitch mcconnell, he is the deal maker for the house and senate on fiscal issues. he talked last night like he had an offer from the president, that was denied by everybody this morning. my guess is this is for show. if there is a deal you will hear about it at 7:00 or 8:00 this evening as legislation popped

onto the clerk's office in the senate hopefully getting up before midnight so they can pass in to order. what they ought to do is take bills the have already been passed by the house, the senate should amend those and pass those to the house today or tomorrow and get the business taken care of. those are pretty good bill that could be amended but we have not seen action from the senate so far. adam: three hundred million americans aged for the law into the potomac. thank you for being with us. bill beach from the heritage foundation. the white house meeting on the fiscal cliff is less than an hour away. we will tell you which companies will be first to get slammed by automatic spending cuts and tax hikes and still ahead a critical weekend for retailers, analyst christian betts says shoppers have all the power right now. she is here coming up but as we do every day at this time we want to check how oil is moving. she's still the one for you -

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adam: we are closer to the automatic spending cuts and tax hikes, literally hours away. some companies will get slammed by the fiscal clipper earlier

than others. liz macdonald has more. you have been looking at this. this is a real issue, this fiscal cliff. liz: ceos and c f os have been looking better and so is wall street. goldman sachs the double warning that companies got to watch out for but these other companies that are heard by the fiscal cliff, a is not just defense contractors but health care companies, those are not just the guys hit by the medical device tax. other healthcare companies as well and environmental companies such as waste management and republicans industries. these are the company's that get 50% or more of their sales from government contracts. when you see spending cuts coming you can imagine they will have to be dialing back on their own capital investment. adam: we are talking about cuts right now but then we have tax hikes. people have less money immediately. some of these will play out over the next few months. people who might lose their jobs

won't lose immediately but all of us have less many come january 1st to spend and as we spend less money there are a bunch of companies not on that list, retailers, the money won't be out there. adam: talk to goldman sachs or barkleys too, looking at all sectors and trying to rank sectors that will get it the most and the worst, basically treasury secretary tim geithner put out the word, tax filing season will be delayed, tax refunds will be delayed, consumers won't have that money in their pockets and consumer conference is sagging but there's optimism always in the u.s. financial market and we will work around and get around this fake fiscal clip that was artificial, was created by aliens from outer space. congress created it and it is emergency style budgeting, what americans are tired of but 1 wall street is saying is we will look at some of these companies and what is interesting about

this study from goldman sachs is you see who was working on the government essentially, sort of measures that out when you see these so-called crazies in washington d.c.. adam: thank you. quarter past the hour. we want to check market every 15 minutes. lauren simonetti on the floor of the stock exchange watching movers in the tech sector, hope you are watching apple. >> apple too but also facebook and research in motion. this is intensifying, the dow three points above 14,000 but facebook shares are what we are watching at the 15 minute point, stocks down not even 1% better earlier down 3%. the new york post reported from an ad tracking from that sad because of the instantgramm privacy policy fiasco they lost 25% of daily active users without further looking into numbers, they realized it was probably because of the holidays

where you slow-growth and watching research in motion these shares are up last i checked by 1/2% and announcing sale of their new unit by taking a big loss but stock is up 1/2%. adam: lauren simonetti, see you again at 2:30. coming up, less than festive holiday season for the nation's retailers. will there be more to celebrate in the new year? christian bets is here next. let's check the dollar against other global currencies. ♪ [ cows moo ] [ sizzling ] more rai.. [ thunder rumbles ] ♪

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adam: oil falling for the second session as gasoline supplies reach a nine month high, sandra smith has more details ffom the pits of the cme. sandra: this from a late government report on energy supplies. normally we get a crude oil report on wednesday but because of the christmas holiday we got it today and we are a few minutes from the close of the trading session for crude oil. it has been quite a week. the second straight day of

losses but still hanging on to the $90 market. this crude-oil inventories key, showing the size of crude oil setting a nine month high, that would be good for gasoline prices to go lower. this isn't always a good sign about the economy. in the face of the fiscal cliff there is concern about what will happen with taxes and american consumers income in the new year. they're backing off of energy consumption. that is leading to lower prices. for the trading, overall volume is half of its 100 a average. we're seeing light participation in those markets and as of today crude down 8%. we are watching natural-gas prices as whether roles throughout the country. folks are using more natural gas pushing prices up, contrary to crude-oil prices going down, the energy report is daily, but it showed 72 cubic feet draw down

in line with expectations but still a very big drawdown pushing prices higher. natural gas prices up 12% so far this year so folks are paying more to heat their homes than the same time last year. adam: thank yoo from the floor of the cme. retail sales of of the worst holiday season in four years. will there be discounts to help retailers close 2012 on a better note? joining us to talk about this is christian bets. may i call you kristy? >> yes you may. adam: a pleasure to have you here. i was reporting the lower-than-expected holiday sales outlooks. why would this week and the crucial? will anything make people spend money they didn't spend before christmas? >> retail is want to think that but the cat out of the bag with the support holiday performance. we see extreme discounts so they can break even and it is an

important weekend but not enough to move the needle. adam: how bad is it going to be? the national retail federation is folding white knuckles to their prediction of 4.1% year-over-year growth. doesn't seem realistic with shopper track and spending paul's revising their outlook. >> they don't want to give up the ghost. numbers don't lie. i was a lone wolf out there saying -- i'm not afraid to say it now -- these should be revising numbers down. unfortunately it is the state of the american consumer. they are afraid, scared and don't have money to spend. >> you have made mention too that people will be taking the gifts they got more things they purchased saying i want the discount price you are selling this for. will stores do that if you bought it before christmas? >> they don't have a choice. retail, a term for that is price

adjustment. you bought something before christmas, go back to the store and the price is cut, you want the adjustment between the new selling price and what you paid for it. that is the common retail practice. in addition you will see a flood of returns, lot of buyers remorse out there. when you are on the floor of the christmas tree with all your boxes and realized your income tax withholdings are going to skyrocket into the new year you make a quick choice about what to do about that. adam: who will take a bigger hit? brick and mortar or on line? the growth was not as big as they thought. >> i was talking about that this morning. in my estimation i always think brick and mortar retail gets hit hardest. it costs more to staff stores with people. the system--a more expensive purchase returning something to amazon. >> if brick and mortar is hurt the most any predictions on which of the major retail chains are going to see this reflected?

we have earnings reports in the beginning of the year, it is not looking like it will be pretty. any names you want to talk about? >> why not? >> thank you. >> it can't get any worse. i would see best by taking a hit. there is a phenomenon we talk about a retail call show rooming where people go into the store and we have the hand held and ipad and comparison shop and see the item in person measuring it is the big screen tv and look at the attributes and talk about the staff for an hour and leave and ordered an online on amazon or another retailer and that is an example of technology hurting retail and -- instead of helping it. i definitely see some softness there. adam: we are out of time but appreciate you being with us on i hope you are wrong. be well, have a wonderful new

year and we will have you back on fbi and. could uncle sam solve the fiscal crisis by selling off billions of dollars in assets? things like amtrak. would you buy? or real-estate. we are crunching the numbers next to the take a look at today's winners and losers.

adam: 30 past the hour every 15 minutes, lauren simonetti is on the floor of the new york stock exchange.

the dow is trying to hold on to 13,000 with exactly eight trading hours left in 2012. we are accelerating to the downside. to quote gerri willis, she said oh when i pointed out we picked up speed to the down side. gerri: we will have a similar remark to the final trading hour. he is joining us -- is this a oh kind of day, >> because there has been no news, like of participation in this marketplace is abysmal so don't read much into it but if you are looking for benchmark 13,000 is doable. >> we will see a pop? >> we hope for one of the clowns -- i mean congress and to give something that will give us the balance we usually get at the end of the day. >> that is why we are complete, adam shapiro, back to you. adam: so many things on would like to say. thank your guest very much. he got a big smile on of me.

we will make sure your money is safe and sound and adjustments doing well. with a few days left to reach a fiscal cliff the lawmaker the scrambling to find ways to close the revenue gap. could the federal government actually be holding the solution in its very hands? >> whenever we talk about tackling federal spending any single line item is either diminished as a drop in the bucket or praised as everybody counts. everyone knows that no single program or line item is going to solve the budget crisis, what do people do when money is tight? they hold a garage sale. from state-owned businesses like an attractive vacant buildings like these in california is a time for the federal government to sell what it doesn't need? >> instead of raising taxes which takes money out of the economy and lowers the economic activity we ought to be looking

at selling federal assets. >> like this hospital in los angeles or parts of this waterfront former military base in san francisco. in both cases politicians said no. >> congressman representing his district and senator representing his or her state so they want to make sure they are taken care of and that may get in a way of what is best for the nation. >> the federal government is america's biggest landlord, selling 20% of its empty or underperforming buildings would save $2 billion. >> goes through your garage, clear it out and the government is no difference. the scale is a matter of scale. >> the refuse to sell valuable public land adjacent to fast-growing cities and let mining companies take billions in gold and silver for free. without charging royalties like we do for oil and natural gas. selling amtrak could net $60 billion. two taxpayer and utilities, tennessee valley authority and our would bring in more.

the commission could oversee the sale to overcome partisan opposition. >> the commission could look at all the federal assets, the side which were the most valuable with the least cost to common good. >> when william was reporting on the federal government gives resources away there was a collective w t f throughout the nation. right now as we try to figure out what is happening with the fiscal cliff congressional leaders head to the white house for a last-ditch effort to avoid these problems. will they get past months of arguments over tax hikes and reach a new deal? gerri willis from the willis report is here to discuss this. you got to be kidding. >> what got our attention is private companies can cart away gold and silver for free. when did that happen? must be true but it is a possibility. i can't imagine how or why but

if you are asking me the question can these groups come together and avert the fiscal cliff, is betting that anything can happen, 26 minutes away from this session, will include the president, congressional leadership, harry reid, john boehner, last-minute invite and mitch mcconnell. here is what they are considering. we have $5 billion in additional taxes kick in after the first of the year. this will affect everybody including middle-class people, $3,500 is the average tax hit for american families. what happened to consumer confidence? is down dramatically. people getting a sense of what will look like and constrain their lives. the wealthier you are the more you pay. a lot of people out there are suddenly and the only now getting the sense of how much money this is going to be and they don't like it one bit. adam: is their legitimacy to selling off government assets?

will homeowners do it? chicago did it, they sold off their parking meters, not popular in chicago. gerri: it is usually desperation police. you saw the city of baltimore, ball park or something, things are as bad as they're going to get and we have to do what we cannand usually they are entrenched interests that won't that use of amtrak or that kind of thing. could it happen? may be right now there is more consideration being given to increasing taxes and that is the problem because that is not what this is about. if you increase the expense of small business operators or people in the middle class the people who float the economy and higher people you won't get the result you want, an economy that is constrained and contracting and getting smaller rather ridge and bigger. adam: one to protect the economy is gerri willis. the willis report tonight at 6:00, 9:00 p.m. eastern on the

fox business network. stocks hanging on every word regarding the fiscal cliff. what is the safest way to plan the market right now? prudential strategist quincy crosby shares her dos and don'ts. we want to check 10 and 30 year treasuries to see how the yields are doing.

adam: i am adam shapiro, crisis averted, union representing dockworkers and shippers resell labor agreement averting a strike that could have crippled the economy. the international longshoremen's association and the u.s. maritime alliance have agreed to exteed the current contract 30 days to finalize details of the agreement. peers and is acquiring a 5% stake in barnes and noble's no

canadian unit worth $8 million. shares of the bookstore chain out today as much as 9% on that news. the media unit consists of the digital business and 674 college bookstores throughout the united states. sources tell reuters blackstone group will keep its money despite a federal insider-trading probe into that hedge fund. the asset management arm of blackstone has $550 million in debt. that is the latest from the fox business network.

adam: president obama and congressional leaders are set to meet in 20 minutes in a last-ditch effort to work out a fiscal cliff deal but without a deal the defense department can expect $500 billion in cuts. how will this affect the

nation's defense contracts? >> the pentagon will face $2 billion over nine years, that works out to $55 billion year cut starting in 2013. the army, navy, air force, marines and coast guard take equal, according to one military analyst who says the impact of the military is, quote, very serious. >> the pentagon and departments are in financial trouble because there has already been a 4 ebullient dollar cut. that is being applied, to take another cut on top of that is devastating. >> it is not just the military itself that will take a hit. defense contractors, private companies that work for the pentagon. one democratic congressman in virginia whose district may be hit hardest says it could mean layoffs. >> the large defense contractors will be okay. they have significant cash

reserves, most of them. smaller contractors would have trouble getting their lines of credit extended, trouble keeping their employees if they can't be assured of continued employment. >> how did we get to this point? in the budget battles of 2011 these spending cuts were put in as an unthinkable trigger to force lawmakers to find a way to cut spending. so far they haven't done it so here we are. >> to make a particularly unpalatable the white house insisted on a coming out of the department of defense budget which many conservatives think is much too harsh and the president's on secretary of defense's would allow the military. deliberately designed to be an aggressive cut on thh military budgets so it wouldn't happen and that is the possibility that it will. >> the only way to avoid these cats being implemented is for congress to reach a deal before the new year. adam: they have attempted to restore these cuts before they take place failing any chance

before we go off of the cliff and make the attempt early in the new year. >> probably. everything is so uncertain and up in the air you can fill what they will do yet. >> that is the problem with defense contractors. thank you very much. happy new year. stocks have been moving on every word from washington and as a result my next guest says it is a trader's market but also says it is key to look under the headlines to get a sense of how the market and economy are performing. joining me now is quincy crosby, prudential market strategist. appreciate you being here. a lot of people are worried about the slowdown in retail sales because of bad holiday shopping. are we headed toward recession? is that what you are getting at? >> note. the idea of a recession is difficult, to take a year to decide whether or not we have gone into recession and usually when they make the decision we

are out of the recession but the fact is things -- housing is strong and autos strong and those two are very important engines for the economy. as long as they stay strong and don't slowdown dramatically we probably have enough energy to keep going but i can say this, if this becomes repeat messy with the cliff, americans across the country are beginning to realize how is going to affect them and that is why use of a slowdown in spending. america, 71% of this economy, $15 trillion economy is consumer spending. if we start pulling back a long small-business owners, we could push ourselves off into the recession. >> all of us hope we avoid that. who is performing well? assuming we are head minksing for problems with you put your money? >> we are like the dividend paying stocks, we like the

largest cap stocks, dividend paying stocks even though they may take a hit it will be a buying opportunity, we like companies that have good market share globally especially if china starts to grow a little bit and we like the european companies that were beaten down particularly the large caps, that we will take advantage of the emerging market, china moving up. we like anything associated with housing and they have been performing very well even on days when the market has been selling off and you can see the strength of their but the warning is if we go off of this, everything is subject to more sell-offs. perhaps more bargain hunting. adam: fiscal cliff negotiations are moving as deadly as rush-hourrtraffic in boston which can be a nightmare. you have a good new year. let's hope they get a deal done. all the best to you.

>> thank you. adam: it is a quarter till time to check stocks again. every 15 minutes we doing here. lauren simonetti will do that at the stock exchange. >> volume is light but traders -- we saw a triple digit loss for the blue chip average down 89 points, declined across the board, volume decisively lower, the margin between gaining and losing stocks is pretty wide. everything is down as i look at the board except the dollar strengthened by the most in the month and the vix index spiking today. adam: the vix is at its highest level since july. lauren simonetti wwll be with us again, thank you very much, at the stock exchange. china training its strong grip on the internet. how will web users respond? take a look at today's other winners and losers.

adam: we are a few meeting minutes away from the meeting on the fiscal cliff, most business owners fear going over the cliff will bring their business to a standstill, when chief executive says won't be impacted at all. jeff flock live in bloomingdale, ill. with more. >> fiscal cliff edge missile cliff says the man i'm about to talk to, this is the antenna

business. nasdaq, they make wireless antennas for wireless communication, marty singer is the ceo, and a lot of your fellow ceos are on pins and needles worried what is going to happen. that is not you. >> i am not and the tragedy of the fiscal cliff is the distraction from issues that influence the economy such as cost of health care, we are facing a 17% increase. >> walk with me so i can show you the plan. you have a huge plant outside chicago making things here. you think that has been overshadowed in the fiscal cliff debate. we have forgotten obamacare and rising costs of health care. >> absolutely. bloated cost of the chinese factory worker is $2,500 a year. my cost of health care in this

country for someone who had a family is $10,000 a year so health care four times the cost of labor. that is what costs. >> i want to put on your customers because you do business with a lot of companies..o cf1 o arr any of them telling you to retrench, we are worried? >> some have told us there is uncertainty but that may delay spending but it is not going to end spending and all of these customers, a high-level executives i talked to are concerned about political theater, not leading to decisions in washington. >> he thinks we are full of baloney, you and me and the rest of us, charities on the end of the fiscal cliff, he is the man with the antennas and he says we are full of it. adam: my bologna is kosher.

>> best kind. >> all the best you, thank you very much. adam: after a turnover in the leadership of china's communist party the country is unveiling new internet regulations creating tighter restrictions and now allowing entire pages to be deleted if they are illegal. what does this internet reforr mean to the people of china for companies doing business? joining us to discuss this is wall street journal editorial board member, did we have the transition of power in china, everyone thought this regime was the more enlightened, less strict and restrictive communist regime but seems four legs bad, legs good is in play. >> this regime is no different from the last one. this is a cat and mouse game china is playing ever since the internet was introduced to china a couple decades ago. it is the latest in a series of restrictions. internet pages already been

blocked. usually foreign websites but what china is discovering it is not the outside world they need to be afraid of but the chinese people who want more freedom. >> for inventors looking at companies in china or doing business in china this would seem to be the beginning of real problem. i mentioned in the commercial break this is why nations fail. you cannot have economic growth but political exclusion. what you have in china with eighty two million members of the communist party who enjoy the benefits and prosperity of their economy your paper has been doing the expose of 160 members of the people's paradiso politburo who are getting incredibly wealthy and their own citizenry understand they are being robbed. don't have a eventually rise up? >> they do. a fallacy about china is all the chinese people are happy because the country has seen such a great expansion of wealth and prosperity since they opened up to the rest of the world in the early 80s but the truth is this

is the very corrupt regime from top to bottom and what the international has allowed the chinese people to do is expose that corruption. we saw it earlier this year with a rising star in the chinese party taken down, the blind lawyer living in new york city, a very famous on the internets and has become more so since he has been here. they have an issue because they need to curb corruption but don't have tools to do and cracking down on the internet will give the viewer tools. adam: would be in the regime's best interest to allow the flow of information and chinese citizens to call out the corruption? >> not of you are a 1-party state. we are sitting in the united states, democracy is different. the question for investors is what kind of companies might be hit by this. i point you to micro block operator which operates a

twitterunlike slightt chinese stocks have been volatile and subject to regulation which is very difficult to predict so here you go, another example of the risks of investing in china. >> appreciate you being here. the florida kissel are watching so we wish them happy new year. autograph collectors listen a. which famous person's john hancock is most likely to be a fake? memorabilia authenticators dna releasing their list of most forged signatures and topping the list, drum roll please, i won't do the dance, elvis presley and the beatles. that would be a great movie. amazingly fewer than half of their autographs are certified as genuine. wait astronaut neil armstrong landed at number 3. this year after his death in july cause a spike in forgeries. rounding out the list are former president john f. kennedy and late pop icon michael -- and

won't singh -- jackson. we need some revenue. and going to take us through the last hour of trading, retail stocks are winning trading 2012 outperforming the market by a wide margin. would happen again in 2013? the case for retail and provides the best investment ideas, "countdown to the closing bell" is next. [ indistinct shoutg ] ♪ [ indistinct shouting ] [ male a announcer ] time and sales data. split-second stats. [ indistincthouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all onnkorswim from tameritrade. ♪